Converting Affordable Housing Plan Into High-Value Plots For Higher Strata Indicates Discrimination: Punjab & Haryana High Court Imposes Cost On HSVP

The High Court was considering two petitions involving the unilateral cancellation of the allotment and refund by the HSVP. One of the petitioners sought the quashing of the decision of the HSVP whereby the allotment made in favour of the petitioner was cancelled without assigning any reason. The petitioner further prayed for allotment of an alternative plot or directions for the respondent-HSVP to decide the petitioner’s legal notice.

The Division Bench of Justice Anupinder Singh Grewal and Justice Deepak Manchanda held,“This Court observes that HSVP, being a public authority was constituted to provide affordable housing on a “no profit-no loss” basis and is expected to act fairly, reasonably, and within the legal framework, but in contrary, the conduct of the respondent-HSVP, appears to be profit-driven and detrimental to the middle and lower-income citizens, thus contradicting it’s statutory purpose. Keeping in view the conduct of the respondent-HSVP, it can be safely drawn that converting a plan meant for affordable housing into high value plots exclusively for the higher strata of society indicates exploitation and discrimination by violating the constitutional and administrative law principles.”

Advocate Kshitij Sharma represented the Petitioner, while DAG Anant Kataria represented the Respondent.

Factual Background

The respondent HSVP had invited online bids for 51 properties in the Panchkula Zone vide an e-auction notice. Pursuant thereto, the petitioner participated in the e-auction and submitted a bid of Rs 1,50,99,300, which was duly accepted. The petitioner paid the entire sale consideration. Thereafter, the allotment letter and offer of possession were issued in favour of the petitioner, where no dues were outstanding. However, on February 20, 2024, the entire amount of Rs 1,50,99,300 was suddenly credited back to his bank account without any prior notice.

The petitioner submitted a detailed representation complaining of illegal cancellation, alleging fraud, and seeking either an alternative plot or payment of damages/compensation. This was followed by a legal notice demanding restoration of the plot or an alternative allotment. Neither the representation nor the legal notice was adjudicated, thereby leading the petitioner to approach the High Court.

Reasoning

On a perusal of the facts of the case, the Bench noted that the petitioner invested his entire lifetime savings to construct a house as a government servant and had legitimately obtained allotment of the Plot, where even symbolic possession was also handed over to him. It was noticed that without assigning any reason, the allotment was cancelled, and the payment was refunded. “Such arbitrary action has deprived the petitioner of affordable housing, violating his right to life under Article 21 of the Constitution of India, particularly considering the steep rise in property prices between 2023 and 2025 and we believe that the petitioner cannot be penalized for HSVP’s alleged discovery of hilly terrain conditions after allotment. Moreover, during proceedings it has emerged that the same land has been levelled and converted to normal terrain for carving out 1000 sq. yard plots as admitted by the respondent-HSVP vide additional affidavit dated 04.09.2025. Therefore, HSVP’s justification is both unreasonable and unjustifiable.”

On the issue of carving out a substitute plot for the petitioner or an allotment of an alternative plot, the respondent-HSVP replied in the negative, citing Clause 39 of the e-auction policy. As per the Bench, this excuse did not stand in view of the respondent’s own conduct in levelling the area and altering the layout for larger plots, where the petitioner had a preferential right as a successful bidder who had paid the entire amount, yet was denied allotment merely due to a unilateral change in planning by the respondent-HSVP itself. Referring to clause 39, the Bench noted that cancellation does not fall within the scope of “circumstances beyond control” as the action was knowingly taken and was very much within the respondent’s control.

Referring to the policies meant for e-auction and allotment of alternative plot , the Bench noted that the same reflected on two different aspects. One dealt with the auction only, and the other dealt with only the allotment of an alternative plot. Noting that these could not be clubbed together, the Bench stated, “Once, purposefully the policy for allotment of alternative plot is already in existence and does not distinguish the category for the said purpose in that case, such an argument will not have any weightage and will not come for the rescue of the respondent especially when the framer of the policies is the same i.e. HSVP.”

Thus, finding the cancellation of the plot allotted to the petitioner to be unjustified, arbitrary and a clear example of mala fide on the part of the respondent-HSVP, the Bench allowed the petition subject to costs of Rs 1 lakh each to be paid to the petitioner within two months. “Further, respondent No.2 is directed to restore the allotment of the plot to the petitioner(s) in the same vicinity, either by carving out a fresh plot in the newly developed site as per the revised plan or through any other suitable alternative measure, within three months from the date of receipt of a certified copy of this order”, it directed.

Cause Title: Vishal Kandwal v. State of Haryana (Neutral Citation: 2025:PHHC:160459-DB)

Appearance

Petitioner: Advocates Kshitij Sharma, Shruti Sharma

Respondent: DAG Anant Kataria, Advocate Deepak Sabherwal, Chief Administrator Chander Shekhar Khare

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